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THE SOCIAL COSTS OF INADEQUATE EDUCATION: Research Pegs Costs of High School Dropouts at Hundreds of Billions of Dollars

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"Educational inequity is first and foremost an issue of justice and fairness," said Henry R. Levin

The United States loses hundreds of billions of dollars each year when young people fail to graduate from high school, according to leading educational researchers who presented their findings at “The Social Costs of Inadequate Education,” a symposium at Columbia University’s Teachers College on October 24. The research, documented in 10 papers presented at the symposium, found that high school dropouts contribute little in the way of tax revenue or productivity, and also present additional burdens to the health care, public assistance, and criminal justice systems.

“Educational inequity is first and foremost an issue of justice and fairness,” said Henry R. Levin, professor of economics and education at Teachers College and chairman of the symposium, “but the research findings we’re presenting today show that it is also an issue that affects all of us in our daily lives-and will affect our children even more so.”

According to research by Cecilia E. Rouse, a professor of economics and public affairs at Princeton University, high school dropouts earn less, contribute less in taxes, and are more likely to be unemployed than individuals with a high school diploma. However, a low-paying job does much more than limit a high school dropout’s ability to buy a car or build a house; it also has a profound effect on federal and state tax coffers. On average, Rouse found that a high school dropout pays approximately $1,300 annually in federal income taxes, $300 a year in state income taxes, and $1,800 a year in Social Security taxes. An individual with a high school diploma would likely contribute twice as much in tax revenue.

Over the course of a lifetime, individuals with a high school diploma contribute just under $60,000 less in lifetime federal and state income taxes. Given these statistics, Rouse calculated that America loses more than $50 billion annually in federal and state income taxes for all 23 million high school dropouts aged 18 to 67, an amount nearly enough to cover the discretionary expenditures for the U.S. Department of Education in FY 2005 ($56.58 billion).

“The income and tax revenue losses associated with a lack of high school completion are already large,” Rouse wrote. “While it is difficult and expensive to improve educational attainment among those at risk of not completing high school, as a society it will also become increasingly costly not to.”

Indeed, a quick look at other research around high school dropouts presented at the symposium tells the story of higher health-related losses and health-care costs, a greater reliance on government support, and higher incidences of crime. For example, Peter Muenning, a public health professor at Columbia University, found that America could save $41.8 billion in health care costs if 600,000 dropouts from 2004 were to advance 1 additional year in educational attainment. In addition, a team of researchers from Columbia University found that if one third of all high school dropouts went on to get a high school diploma, the savings could reach $10.8 billion in reduced costs for food stamps, housing assistance, and spending on Temporary Assistance for Needy Families (TANF).

Enrico Moretti, an economist at the University of California, Berkeley, found that increasing the high school completion rate by just 1 percent for all men aged 20 to 60 would save the United States up to $1.4 billion annually in reduced costs from crime. He also found that a 1-year increase in the average years of schooling could reduce murder and assault by almost 30 percent, motor vehicle theft by 20 percent, arson by 13 percent, and burglary and larceny by about 6 percent.

The symposium was the first major research presentation of the Campaign for Educational Equity at Teachers College, Columbia University, which was launched in June to help close the gap in opportunities and achievement between advantaged and disadvantaged students. More information on the symposium, as well as links to the research papers, is available athttp://www.tc.columbia.edu/centers/EquitySymposium/symposium/symposium.asp.

 

College Faculty Say Student Skills Lacking: 41 Percent Say Students Lack Basic Skills

 

Only half of postsecondary educators say they are satisfied with the quality of their undergraduate students, according to a new survey of the nation’s college and university faculty. The survey, conducted by the Higher Education Research Institute at UCLA, also found that only 36 percent of faculty believed that students arrived in college “well prepared,” compared to the 41 percent of faculty who thought that their students lacked basic skills for college or work.

While educators held less than favorable opinions of their students’ preparedness, students were of a different mind. In a study the institute did last year, a record 70 percent of entering college students rated themselves as “above average” or “highest 10 percent” academically.

Educators at public two-year colleges and public four-year universities and colleges were more likely to say that their students lacked the basic skills necessary for college or work. Faculty at private 4-year colleges and universities, which tend to be more selective, were more likely to say that their students were academically well prepared, as the chart below indicates.

Agree “somewhat or strongly”
All
Universities
Public Private
4-Year Colleges
Public Private
2-Year Colleges
Public Private
Faculty feel that most students are well prepared academically
36%
37%
67%
28%
45%
22%
21%
Most of the students I teach lack the basic skills for college-level work
41%
33%
16%
45%
30%
65%
52%

 

The complete survey is available at http://www.gseis.ucla.edu/heri/PDFs/ACT-Research%20Brief.PDF

 

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